Iran to accept payment in gold from trading partners

TEHRAN Iran will take payment from its trading partners in gold instead of dollars, the Iranian state news agency IRNA quoted the central bank governor as saying on Tuesday.

Iranian financial institutions have been hit by sanctions imposed by the United States and the European Union in an effort to force Tehran to halt its nuclear program.

Significant difficulties in making dollar payments to Iranian banks have forced Iran's trading partners to look for alternative ways to settle transactions, including direct barter deals.

"In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency," central bank governor Mahmoud Bahmani was quoted as saying. "If a country should so choose, it can pay in gold and we would accept that without any reservation."

The sanctions include a phased ban on importing oil from Iran, which EU member states are to implement by July.

China and India, two of the largest consumers of Iranian oil, have said they will continue imports, but Japan and Korea have announced cuts to quotas following pressure from the United States. As a result the value of Iran's rial has plummeted, pushing the price of goods sharply higher across the country.

Western countries believe Tehran is trying to establish a nuclear weapons capability, and the United States and Israel have not ruled out military action against it. The Islamic Republic says its nuclear ambitions are peaceful and that it will hit back if targeted.